Mint Exclusive: India-US trade deal before 8 July, talks next week
A BTA before Donald Trump's reciprocal tariff pause ends on 8 July would likely help India avoid punitive tariffs and reset the bilateral trade relationship on a more stable footing, and provide greater clarity to the industry and markets looking for clarity
India and the US are likely to sign their long-awaited bilateral trade agreement before 8 July when the 90-day pause on the US’s reciprocal tariff action expires, two government officials aware of the trade negotiations said.
A high-level Indian delegation, led by commerce and industry minister Piyush Goyal and India’s chief negotiator Rajesh Agrawal, is heading to Washington for in-person negotiations with their US counterparts. While some members of the Indian team are scheduled to leave on Thursday, others will depart on Friday, the officials said on the condition of anonymity.
“Talks are moving in a positive direction. Both sides are upbeat and confident. We are hoping the agreement can be signed well ahead of the deadline set by the leadership — which originally targeted the fall of 2025, between September and November," one of the two officials said.
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Queries emailed to the commerce ministry remained unanswered.
90-day pause
The urgency stems from the reciprocal tariff framework announced by the US earlier this year, under which a 90-day pause was granted to key trade partners, including India, to allow time for negotiations, after the announcement of steep reciprocal tariffs on 2 April.
A deal before the 8 July cutoff would likely help India avoid punitive tariffs and reset the bilateral trade relationship on a more stable footing, and provide greater clarity to the industry and markets looking for clarity.
The official cited above dismissed the US president’s latest claim that India had agreed to offer zero tariffs on most goods, adding that under the proposed BTA, tariff reductions are being negotiated selectively and not across the board.
“In any trade agreement, both sides negotiate from the perspective of their national interests. The same applies to the ongoing talks for the BTA with the US. They are raising issues important to them, and Indian negotiators are firmly focused on matters that serve the country’s best interests," this official said.
WTO filing a separate move
“The talks are at an advanced stage, and the notice submitted to the World Trade Organization (WTO) will have no bearing on the ongoing negotiations," the second government official said, clarifying that the WTO filing was a separate move aimed at safeguarding India’s rights under multilateral trade rules.
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“At the WTO, India has clearly presented its stance and reserved the right to take retaliatory action against non-tariff barriers. India is not alone—most countries affected by the US’s 25% duty on steel and 10% on aluminium have submitted similar notices," this official added.
In response to Trump's advice to Apple Inc. CEO Tim Cook to stop expanding operations in India, the second official said companies ultimately decide based on profitability and the strength of the local ecosystem.
Robust environment
“Global companies operate where they see better margins and long-term potential. India has already demonstrated to the world that it offers competitive capabilities and a robust environment for companies to grow," the official said, adding that India’s rise as a preferred destination for assembly and production is driven by both market access and policy stability.
According to the officials mentioned above, India has firmly safeguarded its interests in dairy and agricultural products during the trade talks. “Just as every country protects its sensitive sectors, India has taken a similar position. Dairy and other contentious areas will not be opened up to foreign products," one of the officials said. More clarity on these sectors is expected to emerge following the Indian team’s negotiations with their US counterparts next week.
However, both officials maintained that despite the thaw between the US and China, India remains more competitive when it comes to tariffs. While it appears that the US has reduced tariffs on Chinese goods from 145% to 30%, in reality, the effective tariff rate is around 50%, which is still higher than the tariffs imposed on Indian goods.
“The India–US trade deal may be on the cards, with President Trump saying India has agreed to cut tariffs on most goods. Trump has often blamed India’s high tariffs for the trade deficit, so India could offer to make 90% of US exports tariff-free from day one, following a ‘zero-for-zero’ approach—cutting tariffs on all goods except autos and agriculture. But any deal must ensure strict reciprocity, with both sides eliminating tariffs equally," said Ajay Srivastava, co-founder of GTRI.
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